Know-Your-Customer (KYC): The Rarely Discussed Danger (Guest Article/Audio)

Editor’s Note: The following is a guest article submission that I thought extremely worthy of inclusion on this website/podcast feed. The author can be contacted at anarkio@offtherecordmail.com if anyone has comments or wants to recommend Second Realm solutions. He has started a collaborative list of such alternatives here.

Big thanks to Anarkio for the article and the initiative on vonuan-sourcing some ideas.

[Have an article you’d like to submit? Email shane@libertyunderattack.com.]


Introduction

Many people don’t talk about it but unfortunately it’s everywhere. Without KYC documents, opportunities to freely participate in the economy and even survive are limited. KYC is required for jobs, housing, healthcare and more. In addition, many people can’t complete KYC, as they don’t have any government-issued IDs and therefore must rely on the gray market to have access to necessities such as finding work, apartments and medicine. This text clarifies the rarely discussed reasons why KYC is harmful and what can be done about it.

KYC isn’t universal

For many people, KYC is an annoying part of life – filling out forms, showing ID, paying fees, standing in line at the town hall. However, millions of people don’t even have the opportunity to get a government ID, even if they wanted to.

Besides the well-known KYC of crypto exchanges, which creates barriers to the use of cryptocurrencies, KYC has been required for decades for jobs, housing, healthcare and other essentials.

It’s important to note that only documents that come from the state’s databases and state’s printers are accepted for KYC. Non-government documents are unfortunately not accepted. Despite what you would expect, organizations like the United Nations, Red Cross or Caritas don’t offer substitute IDs. Furthermore, commercial IDs from Blockchain companies like Bitnation or micronations like Liberland aren’t accepted. An individual’s own statements of their name and date of birth are ignored. Nothing works without an official document from a recognized nation-state.

KYC is therefore a state monopoly.

You might think – why not just get registered in the state’s database, then the problem is solved? The reality isn’t so easy. If someone wasn’t registered by their birth parents, their religion or the state as a newborn, it’s often too late to register as an adult. As an adult, there is little chance to convince the state to give you a birth certificate or passport from scratch. This fatalistic system condemns the individual (who throughout their life has collected a wealth of knowledge, beliefs, experiences and relationships) to the unchosen and unchangeable situation of birth. An individual is personally punished for the actions of third parties (usually the state or birth parents); actions that they neither chose nor could influence as a powerless, innocent newborn; actions that will affect them for life. No matter what efforts an individual makes as an adult, the fatalistic system of the state allows them no opportunity to correct this circumstance of birth.

Even if someone has a government-issued ID, it isn’t always safe to use it. For example, victims of child abuse or domestic violence could be tracked down by their abusers via skiptracing or social engineering. Someone who has escaped from a cult, gang or mafia could likewise be tracked down by their persecutors via skiptracing. In addition, the name or nationality on the ID card could pose dangers. According to the state, a victim of abuse isn’t allowed to choose a new, safe, self-chosen name. Instead they must live with the fear and trauma of their birth name on a daily basis for the rest of their life, being forced to listen to, introduce and identify themselves with it. Individuals should have the right to freely choose a name, with which they identify and which brings them joy – not a name chosen by a third party that reminds them of decades of pain and fear and could put them in danger even now.

Furthermore, the state doesn’t have the right to decide someone’s nationality or culture. If a country or culture persecutes someone, or if someone simply doesn’t identify with their birth country, they should be able to liberate themselves from their birth country and/or birth culture. As of today, victims of cultural or state persecution are expected to endure it until death; be forced to identify themselves as a member of this culture; and as an unwilling “citizen” of this country, they may still be exposed to danger even after emigration. Another danger of KYC is the ease of tracking and repression by the state. Victimless “crimes”, such as activism, journalism, following a different (or no) religion, being LGBT, running certain businesses, defending yourself against theft, taking recreational drugs or making any other perceived offense against culture or regulations, can put people at risk of imprisonment or even the death penalty, even though they didn’t hurt anyone. These people are at huge risk if they use their government-issued ID, and they need alternatives through which the state can’t track them down.

Some people believe that it’s easy to get asylum, witness protection or stateless status. Unfortunately, this isn’t the case. These systems are also state monopolies. Someone is only considered in need of protection if the state decides so. The state’s decision is more often negative, and if rarely positive, it can take years of instability and fear to receive this vital decision. An individual’s personal experiences, trauma and testimonies are often ignored or used against them. Every day, victims of violence are ignored, disbelieved, blamed for the violence, imprisoned or worse, knowingly sent back to the abusers, which often means death. An official of the state shouldn’t be allowed to make life or death decisions on behalf of a victim of violence, but unfortunately under the state’s systems, such horror is an everyday normality.

The discrimination goes even further. Many states commonly make ID controls without a reason, for example on the streets, in parks or in train stations. Through this they can detain people without ID, without a probable cause or specified crime, without presumption of innocence, without a lawyer, without a court case, without the option to pay fines, without release on good behavior, without amnesty, and without an end, until their “state-assigned identity” is found out. This is often done by publishing their photo online and in the media, sending fingerprints to state agencies and embassies, accent analysis, psychological interrogation and even DNA analysis. For people who have never been registered in the state’s database, no matches are found and the imprisonment continues. For people who are found in the database, but who have escaped from abuse, it can mean death if the publicized search allows the abuser to locate their victim or worse, if the state intentionally sends them back to the abuser.

Some libertarians talk about the benefits of a second passport or the Flag Theory. Unfortunately, this only works if you have an existing birth certificate or passport. Even if you have money (but no state-approved identity), it remains impossible. Even the discussed IDs for undocumented people require an existing government-issued ID (such as a birth certificate or old passport). This means that this program is limited to people who have ID but no visa, and it offers no help for people who have no identity documents at all, even if they would otherwise be eligible to get a visa, such as for a job as a highly skilled professional, marriage to their long-term partner or if they have already lived in the country for decades.

Therefore, it should now be clear that this problem can’t be solved through the state’s channels.

KYC doesn’t equal trust

The state advertises KYC under the pretense of “keeping bad people out”. It claims that KYC prevents terrorists, mafias, money launderers, thieves and other strawman enemies from getting access to finances, communications, contracts and more.

Firstly – KYC is plain ineffective. People who want to do immoral things, such as sell weapons of war, plan terrorist attacks, steal individuals’ money or otherwise hurt people, often use their own IDs or own offshore companies; hire mules who use their own IDs; buy lost or stolen IDs; have connections to corrupt officials who print legitimate IDs; or are simply employed by the state itself. This has happened since hundreds of years and KYC doesn’t and won’t change this.

Secondly, as you have read, KYC excludes ordinary people from necessities such as jobs, housing and healthcare, who are often already in difficult situations. They are the true victims of KYC practices.

Of course, it’s clear that “terrorism and theft” are emotive but hollow strawmen (especially since the state is also guilty of terrorism and theft), and that the so-called dangers are only excuses, so that the state can expand its surveillance, regulations and restrictions with little protest.

Unfortunately, many people genuinely believe the paranoid pretenses behind KYC. If someone admits that they don’t have any government ID, they are often met with suspicion. Between ignorant questions like “Are you a fugitive? What have you done? Or are you a spy?”, traumatic questions like “But what is your real name? But where are you really from?” and even threats of violence like “Get out or I’ll call the cops”, such reactions make a precarious situation even more dangerous and puts the blame on the victim who is in a difficult situation through no fault of their own, rather than blame the state who has caused this situation. The state isn’t a beacon of trust, a spokesperson for innocence, nor an arbiter of “real names” and “real nationalities”. If you want to trust someone, you have to talk to that person, act together and get to know their reputation. You don’t rely on the fallible databases of the state. The cultural discrimination and mistrust against people who don’t have government ID is illogical and makes an already bad situation even more difficult.

In addition, for systems that require authentication or reputation, KYC is blatantly disproportionate. Instead of requiring a state-assigned identity, it’s completely sufficient to use a simple password or PIN, a self-chosen pseudonym or a cryptographic keypair. Already, pseudonyms, passwords and cryptographic keypairs are used every day to successfully create, use and protect online and physical identities, cryptocurrencies and second realm businesses.

Now it should be clear that there is no genuine reason for KYC. It doesn’t stop people who want to do harmful things and worse, it excludes innocent people from daily life necessities.

KYC excludes people from basic necessities

The list of things that require KYC is huge and it affects almost everything in life: Getting a job, opening a bank account, renting an apartment, going to the doctor, driving a car, buying a sim card, receiving mail, online shopping, renting a hotel room, taking classes, volunteering, signing contracts and subscriptions, even going to the gym or library. Without ID, you can’t do it.

Corona statism makes this even more difficult. Cash is no longer accepted in many places, only credit cards and bank transfers. Physical stores are closing, and payments and deliveries for online shopping often require ID. Opportunities for jobs for cash such as gastronomy, cleaning and construction work are decreasing. In many countries, curfews are set and police and military carry out random ID controls on the streets. Corona tests, vaccinations and the discussed corona passports additionally require ID.

KYC also harms people who have ID

Even if you have a safe ID, in a name that you identify with and from a country that poses no threat to you, KYC can still be risky. Apart from data leaks (unintentional leaks like hacked bitcoin exchanges and phishing, as well as intentional leaks like disclosures and data sharing) that allow absolutely anyone to access your most personal information, there is another danger of KYC. Through KYC, the state knows where you live, where you work, how much money you have, how you earned it and what you spend it on. Through registered SIM cards or internet contracts, the state knows who you talk to and, if not encrypted, what you discuss. The dystopian image of microphones in the walls during communism isn’t over – but now made all too easy. Individuals should have the right to decide how much or little someone knows about their life. Someone wouldn’t tell a complete stranger (nor an abuser) their home address or financial situation – such information is reserved for trusted close friends. So why tell the state (and the hundreds of strangers who work there) this information? In comparison, KYC-free alternatives respect your privacy and personal safety.

KYC-free alternatives help everyone

Surviving without ID means living mostly outside the control and knowledge of the state. For many people this is pure survival, but it can also be useful for people who have ID but want to be more independent from the state or access services anonymously. Fortunately, some KYC-free alternatives already exist and they are hugely important.

Examples:

  • An employer who doesn’t ask for ID and pays with cash or crypto can help people to buy necessities like rent and food.
  • An anonymous health clinic can save lives.
  • A roommate who rents out their spare room for cash can save someone from homelessness.
  • A convenience store that sells anonymous sim cards can allow people to stay in contact and have internet access.
  • A mailman who doesn’t ask for ID can help people to buy things that aren’t in local stores.
  • A friend who has a bank account can help someone to pay bills or receive money.
  • A neighbor who goes grocery shopping for someone, while there are ID controls on the streets, helps them to get food.

These alternatives are often done for profit or time savings. The seller of anonymous sim cards accepts the risk that the sim cards are in their name if they can earn a profit from this. The doctor makes more money if they agree to treat out-of-pocket patients, and sees no reason to require ID and potentially lose patients because of this. The roommate doesn’t have to fill out forms or deal with bureaucracy if they informally rent out their spare room for cash. In this free gray market, people can easily get what they want, whether it’s an apartment, sim card or medical treatment, and they only need to bring cash or crypto.

Another group of alternatives are charities and mutual aid networks. Some anonymous health clinics provide medical treatment to people without ID, often supported by donations and volunteers. Neighborhood help groups go shopping, lend money, offer jobs or even find free housing for people in precarious situations. Due to bureaucracy, it’s often difficult for people without ID to get a regular job, despite their skills, effort and work ethic. Therefore, both commercial and charitable alternatives are very important.

So, what can you do?

What can you do, especially as an anarchist? Some examples are already mentioned above. In summary: Build agorist and cryptoanarchist places, become a proxy merchant between first and second realms if possible, and most importantly have solidarity with each other. Build an economy, community and neighborhood for everyone, regardless of documents or status.

If you don’t know about agorism, first/second realms or proxy merchants yet, I recommend the following texts:

  • An Agorist Primer – SEK3
  • Second Realm: Book on Strategy – Smuggler & XYZ

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Both texts are short, informative and contain many examples and practical information.

Here are some starter examples, but many more can be added:

Jobs:

  • Offer jobs in exchange for cash. If you need a carpenter, pay someone in cash through Craigslist instead of hiring a big company. If you want apples, buy from a local farm instead of Walmart.
  • Offer jobs for crypto. Need a website? Pay a remote freelancer in bitcoin. Instead of platforms like Upwork and Fiverr that require Paypal or a bank account, use crypto freelance websites like Microlancer.io and FreelanceForCoins.com
  • Build freelancer collectives. Make a virtual collective or a physical coworking space for freelancers. Open a shell company with a bank account so that freelancers can make contracts and get paid. Offer PO boxes and office space for work and meetings.

Finance:

  • Use P2P crypto exchanges like HodlHodl.com and Agoradesk.com. Pay someone’s bill via bank transfer or Paypal for bitcoin. Sell anonymous prepaid debit cards. Sell gift cards for online stores for bitcoin. Exchange crypto and cash in your city. Open a bitcoin ATM.
  • Accept crypto payments in your business, instead of only bank transfers, credit cards or Paypal. If it’s technically difficult, at least sell gift cards for your business that can be purchased with crypto.

Mutual Aid:

  • Make fundraising and mutual aid groups. Help people if they are unemployed, ill or have medical expenses. Start a health insurance with bitcoin. Lend money to people who need it. BTCPayServer offers a bitcoin fundraising platform, similar to GoFundMe and Kickstarter.
  • Make free stores, do foodsharing, barter and exchange products and services, e.g. bicycle repair for graphic design, haircut for homemade bread, apples for potatoes.

Housing:

  • Rent out apartments, spare rooms and land for cash or crypto. This can be long term, or a short term alternative to hotels and AirBnB.
  • Organize free housing for people who need it. Find an understanding landlord and fundraise the rent each month.
  • Make housing projects and intentional communities. Whether apartments in the city, a trailer park or a rural village. Live with other anarchists and build a safe place to live.

Health:

  • As a doctor, dentist or pharmacist, treat people without ID and without insurance, and accept cash or crypto payments.
  • Anonymous health clinics on a voluntary basis, supported by donations.
  • Import medicines that are over-the-counter in other countries and sell them to people who need them.
  • Make your own medicines, like Four Thieves Vinegar Collective.
  • Learn first aid, biohacking and other DIY medical topics.

Communication:

  • Sell anonymous sim cards so that everyone can have access to the internet. You can import sim cards from countries with no ID requirements, or register sim cards under your name or the name of a shell company.
  • Make a city-wide communal wifi like Freifunk or setup a public wifi in your business.

Everyday life:

  • Neighborhood help. Go shopping for someone if there are ID controls on the streets. Help someone with online shopping – they pay you in cash, you order and receive the package, and they pick it up from you.
  • Offer an anonymous PO Box service where people can send mail to your business and pick it up with a code.
  • Ridesharing and taxi services for cash or crypto. Many taxi apps only accept credit cards or Paypal. Driving is risky without ID and many places have no or limited public transit.

Social:

  • Start meetups. Meet with other anarchists, do things together, support each other and have fun. Meet physically e.g. in a cafe, infoshop, hackerspace or park, or virtually e.g. in a signal group, matrix server, forum or mailing list.
  • Skill sharing. Teach something and learn something. Many colleges, libraries and community colleges require ID. Make alternative schools, classes, meetups and educational websites, e.g. first aid, sports, software development, DIY skills, foreign languages, music, science and more.

You don’t have to do everything. Just be there, listen, and offer a helping hand when possible. The beauty of agorism is that you can do what you want, according to your resources, skills and desire; you can do a little or a lot; you can decide how much or little risk you want to take; and you can do it right now, to liberate yourself and your community from the illegitimate violence of the state. No need to wait for “The Revolution” or the actions of others. With agorism, every individual is their own liberator, every business is their own island of the second realm, every small action of solidarity is a revolution.

In the times of corona statism, creating alternatives is even more important. Corona statism, with its restrictions, surveillance and constantly expanding control makes it harder to survive and there is no sign that it will end soon. Small businesses are forcibly closed, people can’t visit their friends or relatives, children aren’t allowed to go to school, people can’t even go outside for a walk, if the cops and military don’t agree. What used to be a faraway, paranoid dystopia is now a harsh reality since over one year. The state has learned that it can take control of the most basic necessities with little protest, and it won’t want to let go after the corona pandemic is over. Therefore it’s important to continue to fight tirelessly against statism and to build and defend agorist alternatives, and to act now before it gets much worse.

Conclusion

Hopefully, this text can start a conversation about this rarely discussed but important topic. Now you should be aware of the dangers and inaccessibility of KYC and the need to create KYC-free alternatives. Let’s continue to fight against ever-growing statism and build agorist places where everyone is free to live and act. Let’s treat individuals as individuals regardless of documents or status. Let’s make the power of a record in the state’s database obsolete and with this, end the violence of the state.

Long live anarchy!


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